Photo caption: Faith Ngwenya
Authored by: Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accountants (SAIPA)
By law, Professional Accountants may assume the additional responsibilities of the independent reviewer, business rescue practitioner, tax practitioner or tax technician. However, the law does not stipulate the standard of competence they must meet to ensure they are capable of delivering the said services. This is left to the discretion of the professional body of which they are members.
At the South African Institute of Professional Accountants (SAIPA), we have committed ourselves to a high standard of demonstrable competence in order to protect the public interest and the way in which the profession is perceived.
Meeting standards for competence
SAIPA is a voting member of the International Federation of Accountants (IFAC), a standards setting body for all aspects of accountancy. IFAC’s work revolves around protecting both the public interest and the reputation of the profession. On our own volition, we, therefore, adhere to its mandate to promote its prescribed levels of competence among our members.
From a business perspective, a high standard of proficiency in Professional Accounting and associated duties wins favour from users of those services, resulting in increased engagement. So every accountant should strive to not just meet the standard but to offer their very best performance at every opportunity.
Regulation 29 of the Companies Act permits an accountant who is qualified to be appointed as an accounting officer for close corporations, in terms of the Close Corporations Act, to carry out independent reviews of any company whose public interest score is lower than 100.
Since 2011, SAIPA has developed a robust qualifications framework for training our members in independent review. This includes a course comprising thirteen modules. After completing it, candidates must write an online assessment and achieve at least 75 percent to be recognised by the Institute as competent to carry out independent reviews.
In terms of Regulation 138 of the Companies Act, Professional Accountants can be appointed as business rescue practitioners. SAIPA requires its members to specifically apply for recognition as a practitioner and to demonstrate they have the necessary competencies.
They must first obtain a certificate in business rescue, currently offered by the University of Johannesburg, the University of Pretoria and UNISA, and supply the Institute with a copy of the award. They must also provide a CV indicating they have gained experience in business rescue, insolvency, liquidation or turnaround strategies, as well as the contact details for references who can confirm this. The last leg of the recognition is an intense panel interview which is a technical, verifiable assessment of competence. Only after meeting these requirements will a member be issued with a letter of good standing.
Section 240A of the Tax Administration Act allows anyone who is regulated by a Recognised Controlling Body and participates in continuous professional development set by that body, to register with SARS as a tax practitioner. SAIPA is a Recognised Controlling Body with SARS.
Any member who wishes to operate as a tax technician must first achieve an NQF level 5 qualification and tax practitioners must hold an NQF level 6 qualification, even though SARS requires only an NQF level 5 for both. They must then complete an online assessment at a designated secure assessment facility. This is to ensure the credibility of the assessment process.
SAIPA offers its members professional indemnity cover of up to R7 million for full members and R4 million for affiliate members per annum. This is a boon to every accountant as there are inherent risks in providing financial services, especially where any level of professional assurance is provided.
SAIPA cannot prevent members who have not been certified through its assessments from offering the extended duties mentioned above. However, without having been declared competent by the Institute to perform them, those members will not be covered for any engagement involving such services.
Good competence makes sense
Some members have complained that they are required to meet a higher standard of competency than prescribed by law to take on these roles. But, in most cases, the law does specify that the regulatory body will determine the standard, either directly, as in the Tax Administration Act, or indirectly, as with the Companies Act, which requires independent reviewers to be members of “good standing”. It behoves SAIPA to ensure one’s proficiency is not only based around the law but, more importantly, the needs of the clients they serve.
It makes ethical, professional and business sense for each Professional Accountant to strive for the highest standard of competence they can master, regardless of the duties they perform. Not only will they better protect the public interest - the accountant’s first responsibility - but they will also build trust in the profession, resulting in higher engagement with customers and employers alike.
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